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Motilal Oswal Report
EPL Ltd. reported a healthy operating performance in Q2 FY25. Ebitda grew 22% YoY, led by Europe (up 2.1x YoY), followed by the Americas (up 59% YoY; ramp-up of Brazil). However, Ebitda for AMESA declined ~6% YoY (due to negative pricing YoY in India), while East Asia and Pacific grew marginally by 3% YoY.
A strong margin recovery in Europe and the Americas is expected to sustain, aided by measures such as manufacturing realignment in Europe (shifted plant from Germany to Poland), robust performance in Brazil (added three new MNC clients to date), and a better product mix (increasing mix of personal care and beyond).
Factoring in a strong performance in Q2, we increase our FY25E earnings by 5% and broadly maintain our FY26 estimates. We value the stock at 20 times Sep'26E EPS to arrive at our target price of Rs 315. Reiterate 'Buy'.
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